Bitcoin Bull is Back With a 25% Jump

Millennial Man Trading Cryptocurrency

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Well, that was quick. Less than two weeks after cryptocurrencies hit a nadir in the wake of the FTX collapse, Bitcoin has rallied 25% amid speculation the cryptocurrency selloff late last year was too much and too fast.

Key Takeaways

  • With Bitcoin gaining 25% and Ether jumping 20% in the past week, there's a bullish sentiment across the market.
  • The fall in inflation contributed to the recent rise in Bitcoin and other cryptocurrencies.
  • The market has breached $1 trillion for the first time since the FTX collapse in November.

Bitcoin Gains Momentum

When Consumer Price Index (CPI) report came last week that inflation is cooling off in most of the U.S. economy, Bitcoin hit a two-month high at $18,856, up 8%, as investors hoped that the Federal Reserve would reverse, or at least soften its rate hike policy. This suggests that Bitcoin is also becoming macro now, no longer a hedge against inflation. 

Additionally, Bitcoin mining difficulty rose more than 10% to 37.59 trillion from 34.09 trillion on Sunday, a new all-time high. The difficulty of mining tends to increase when a blockchain network grows and is a sign of increased activity. The flagship cryptocurrency jumped traded at $21,130 at 11: 30 PM, New York time.

Ethereum Upgrade is on Horizon

Ether, the native token of the Ethereum blockchain network, gained over 17% in the past week, trading at $1,568 at 11: 30 PM, New York time. Apart from macroeconomic factors, the upcoming Shanghai upgrade on the network that allows users to withdraw their staked Ether has also contributed to this momentum. 

Simply put, the Shangahi upgrade follows 'The Merge' that shifted the Ethereum blockchain network from proof-of-work to proof-of-stake in September 2022. A tentative timeline of March 2023 has been set for the Shanghai upgrade.

Besides Bitcoin and Ethereum gains, Avalanche, NEAR, Aave, Polkadot, and Solana also surged over the past two weeks, helping the crypto market reclaim $1 trillion.

The Bottom Line

The surge in the market has given investors hope that crypto will continue to flourish despite layoffs and bankruptcy. Even a banking giant like Bank of America believes cryptos are the future and a new form of payment as it will likely change ''how and when value is transferred over the next 15 years.''

As the markets rebound, inflation cools, and signs of economic stability return, traders are optimistic about the resurgence of the crypto bull market. 

Article Sources
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  1. CoinMarketCap. ''Cryptocurrency Prices by Market Cap''

  2. CoinMarketCap. ''Bitcoin Price.''

  3. Coinwarz. ''Bitcoin hash rate chart.''

  4. CoinMarketCap. ''Ethereum''

  5. CoinMarketCap. ''Cryptocurrency Prices by Market Cap''

  6. CoinDesk. ''Bank of America Says CBDCs Are the Future of Money and Payments''

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